So has former NSW Premier, Mike Baird moved into the running for the top job at the National Australia Bank – 21 months after surprisingly pulling the plug on being the leader of NSW?
His move up the greasy pole of success at the NAB yesterday was cautiously greeted by investors who marked NAB shares up 0.7% to $27.56.
The news from the royal commission has not good been good for the NAB and other financial groups, but investors seem sanguine about any lasting negative impact.
The NAB’s pre-market opening on senior management changes came as a surprise to investors. Andrew Hagger, the head of consumer banking and wealth management, is leaving and will be replaced by former NSW Premier, Mike Baird.
He follows Antony Cahill, NAB’s Chief Operating Officer who left last month to join payments giant Visa as managing director of its European regions.
It means that in the space of three weeks National Australia Bank has lost two of its most senior executives and possible successors to CEO Andrew Thorburn.
We have already seen the senior management at the Commonwealth Bank cleaned out over other issues (such as the Austrac money laundering scandal and early disclosures from the royal commission) and the AMP lose the CEO, chair and several board members over disclosures earlier this year.
Some analysts and commentators reckon this may be a problem for banks and financial groups, but it is a necessary part of the cleansing and repair that will have to happen in financial services in the wake of the royal commission’s revelations – many of which have been shocking in the extreme.
Hagger’s job had been reduced as a result of NAB’s decision to exit wealth management.
He reportedly wanted to leave the group in July but was talked into staying. That saw him go before the royal commission a second time for a monstering on the fees for no service issue.
Now the NAB has asked NSW Premier Mike Baird to take charge of its key retail business and repair the damage. it will be an enormous task.
Mr. Baird quit as NSW Premier in January 2017 and has led NAB’s institutional bank since April the same year and will become chief customer officer for consumer banking.
Baird doesn’t have any baggage from the Royal Commission while Mr. Hagger, who survived a first appearance, ran into heavy weather last month at the commission and was criticised by counsel assisting for showing “a disrespect for the role of the regulator and a disregard for the gravity of the events in question” over his response to the fees-for-no-service scandal.
“I take accountability for what has occurred on my watch, and accept that alongside successes were failures, including instances where we did not act with the pace required,” Mr. Hagger said in the NAB’s statement on Monday.
“I leave NAB with confidence that we are creating a better bank.”
Counsel assisting the commission has already said in submissions to the Royal Commissioner, Mr. Hayne that NAB – and the Commonwealth Bank – may have committed civil, and possibly criminal, offences.
They said NAB’s superannuation trustees MLC and NULIS may have engaged in misconduct and breaches of corporate and superannuation laws by charging fees when no advice service was provided.
ASIC, the corporate regulator is already investigating “suspected offending” by the NAB group over fees for no service.
NAB chief executive Andrew Thorburn said in yesterday’s statement that the separation of the bank’s wealth business from consumer operations to prepare for a demerger and IPO was a factor in Mr. Hagger’s decision to leave.
“With the recent bringing together of the wealth businesses … to prepare for separation from NAB, Andrew Hagger believes now is the right time to leave,” Mr. Thorburn said on Monday.
